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Civil Servants Short-Changed: Sulaimaniyah
26.4.2006
By Wrya Hama-Tahir in Sulaimaniyah (ICR No. 174,
26-Apr-06)
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Authorities in Iraqi
Kurdistan dump worthless currency on public sector
employees.
Mohammad Ahmad, a 34-year-old civil servant in
Sulaimaniyah, recently brought home a treat for his
child: 2,000 dinar, a little over one US dollar, in
change.
His three-year-old son's response, "Is this is a
trick?"
In Kurdistan, Iraqi coins are used to make jewellery
and play games, and even children know they have no
monetary value.
Since February 2006, civil servants have received
2,000 dinars of their salaries in coins, which in
Iraqi Kurdistan are not accepted as payment for
utility bills or to even buy a cup of tea.
"The government is getting rid [of the coins] by
giving them to us," said Ahmad. "It's ridiculous."
Saddam Hussein's regime kept the Iraqi dinar at a
fixed rate of 3.22 dinar to the dollar in the
Eighties, but its value plummeted under
international sanctions in the Nineties. The dinar
is now valued at about 1,465 to the dollar, making
25 dinars worth about 1.7 cents.
The government began issuing 25 and 50 dinar coins
in 2004, but they have never been popular. Inflation
since the fall of the regime three years ago has
significantly driven up the prices of almost all
goods, making the small coins nearly worthless.
"People don't like coins because they are heavy and
they're not easily transacted," said Mussa Tofiq,
professor of economics at Sulaimaniyah University.
The Iraqi central bank has tried to get rid of its
reserves of coins by getting the government to use
them to pay part of civil servants' salaries. It has
issued about 1.2 billion dinars, or about 818,000
dollars, in coins to Iraqi Kurdish banks since
January 2006, said Mohammad Abdullah, head of the
government-run regional General Bank in Sulaimaniyah.
The problem, civil servants say, is that even
government agencies, including the state banks that
issue the coins, won't take them back.
"They don't even accept them for electricity bills,"
said Mohammed, whose children use the coins from his
salary to play games. "The government doesn't have a
plan. It can't force the coins to be circulated in
the market."
Tayyb Tahir, a teahouse owner in Sulaimaniyah,
charges 150 dinars for a cup of tea but said he
never accepts the coins because he can't use them
for change or to buy goods in the market.
"The central bank was wrong, and now the government
doesn't know how to deal with [the problem]," said
Tahir.
Abdullah said officials are waiting for the Iraqi
Kurdistan ministry of finance to issue a decree
forcing banks and government ministries to accept
the coins.
He insists that the coins will eventually have
value, “When the country is stabilised and
developed, the coins will be used for telephones,
gas, electricity and other things."
Tofiq said the government might also be able to
solve the problem by creating more valuable coins,
such as denominations of 250 and 500. "The most
important thing is that the government itself
accepts them," he said.
Wrya Hama-Tahir is an IWPR trainee journalist in
Kalar.
iwpr.net
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